Working While on EI: The 50-Cent Rule, Explained

How the 50-cent rule works

Taking part-time or casual work doesn't end your EI claim. Instead, Service Canada reduces that week's payment based on what you earned. The rule has two parts:

• Up to the line: for each dollar you earn, your benefit drops by 50 cents. You keep the other 50 cents, so working always leaves you better off than not working.
• Above the line: once your earnings pass 90% of the weekly insurable earnings Service Canada used to calculate your benefit, each extra dollar is taken off your benefit dollar for dollar.

canada.ca describes the line two ways: as 90% of "the weekly insurable earnings used to calculate your EI benefit amount" on the regular benefits page, and as 90% of "your previous weekly earnings" on its working-while-on-claim page. In practice both mean the average of your best weeks that produced your benefit rate (see how best weeks work).

canada.ca says the rule covers any type of EI benefit, including sickness, maternity and parental. On regular benefits it applies once your waiting period has been served. For claims that start between October 11, 2026 and October 9, 2027, the one-week waiting period is waived under a temporary measure (Pilot Project No. 25), so the rule applies from your first payable week. That waiver is not permanent; check the waiting period guide for the dates.

Worked example: four different weeks

Priya's best-weeks average is $1,000 a week. In 2026, 55% of $1,000 gives her a weekly benefit of $550. Her 90% line is $900 (90% × $1,000). Here is what happens in four different weeks of part-time work (all figures before tax):

Two things stand out. First, every row up to $900 of earnings leaves Priya with more money in total than the row before it. Second, once she passes the $900 line, her total stops growing: in the $950 week, the extra $50 above the line is clawed back in full, and her EI plus pay settles at $1,000, the same as her old average weekly pay. If she earned $1,000 or more in a week, the deduction would equal her whole $550 benefit and EI would pay nothing for that week.

Where your 90% line comes from (and the 2026 cap)

Your line isn't based on your last paycheque. It's based on the same average that sets your benefit: your insurable earnings over your best weeks in the qualifying period, divided by a number between 14 and 22 that depends on your region's unemployment rate. Look up your region on the regions page rather than relying on a rate someone quoted you, because it changes month to month.

Insurable earnings are capped. In 2026, the maximum insurable earnings are $68,900 a year, which works out to $1,325 a week ($68,900 ÷ 52). That is why the 2026 maximum benefit is $729 a week. For someone at the cap, the 90% line is about $1,192.50 a week (90% × $1,325), no matter how much more they used to earn. Earnings over that are deducted dollar for dollar.

If you don't know your exact average, your benefit statement and our guide to the weekly amount will help you work backwards: divide your weekly benefit by the 2026 rate of 55% for a close estimate of the average behind it.

Full weeks, partial weeks and your benefit period

If you work a full week, you are not paid EI for that week, whatever you earned. canada.ca says this doesn't reduce the total number of weeks payable on your claim.

There's a catch worth planning around: your benefits still have to be used inside your benefit period, which is usually 52 weeks from the start of your claim. If you work a lot of full weeks, the calendar keeps running, and you may reach the end of the benefit period before you've used every week you were entitled to. See how long you can collect EI for how the weeks and the 52-week window interact.

Insurable hours you work while on claim can also help you build toward a future claim, which matters for seasonal and contract workers.

What to report, and when

On each biweekly report you are asked whether you worked and how much you earned. Three rules prevent most problems:

• Gross, not net. Report your pay before tax and other deductions come off.
• The week you worked, not the week you were paid. If you work Monday to Friday and get paid two weeks later, the earnings belong to the week you worked. Use your hours × hourly rate if you don't have a pay stub yet.
• Report everything. Small amounts, cash jobs and one-off shifts all count. Unreported earnings found later become an overpayment you must repay, and deliberate false statements can bring penalties.

Money paid because your job ended (severance, vacation pay on separation) follows different rules from wages for new work. For claims that start between October 11, 2026 and October 9, 2027, those separation monies are temporarily not deducted from benefits; see severance, vacation pay and EI. EI itself is taxable income, so plan for tax on both your pay and your benefits (EI and taxes).

Your situation may differ from these examples. For a decision on your own claim, contact Service Canada at 1-800-206-7218.